What does Hazard mean? Read on to discover the definition & meaning of the term Hazard - to help you better understand the language used in insurance policies.
Any factor that creates or increases the chance of loss. A physical hazard is created by the condition, occupancy, or use of the property itself. Examples include faulty brakes increasing the chance of collision and faulty electrical wiring increasing the chance of fire. A moral hazard is a subjective characteristic of the insured that increases the chance of loss. Examples include arranging an accident to collect the insurance and inflating the amount of a claim. A morale hazard is carelessness or indifference to a loss because of the existence of insurance. Leaving the car keys in an unlocked car is such an example.
We hope the you have a better understanding of the meaning of Hazard.